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Nintendo on Thursday announced a September 13 Japan launch date and a price tag of Y12,000 ($109) for its new handheld game machine, the mobile phone-sized Game Boy Micro, adding another device and platform to the already intensely competitive gaming market.

The company said the Micro, the world's smallest dedicated game console with what its hopes will be a style catering to fashion-conscious consumers, would target the relatively untapped young-adult segment of the market.

Nintendo, which will launch the Micro in the US on September 18 at a price of $99 and in Europe on November 4 at €99 ($120), aims to sell 4m Micros in its first year.

The launch of the Micro comes as Nintendo faces fierce competition in the handheld market, which it used to dominate, from newcomer Sony.

By the end of June, Sony had sold more than 5m units of its first handheld console, the PlayStation Portable (PSP), which was launched in Japan last December, compared with 6.65m units for the Nintendo DS, which came to the market the same month.

Sony forecasts global shipments of nearly 16m units for the PSP by the end of next March, compared with a forecast by Nintendo of 17m for the DS.

Nintendo also continues to enjoy brisk sales of its Game Boy Advance (GBA), also a handheld device.

But its strategy of offering so many different platforms has raised concerns that Nintendo may be overstretching itself. In addition to GBA, DS and now Micro, Nintendo has the GameCube console, and will be launching a new console, Revolution, next spring.

“Is [the Micro] really worth the potential dilution of existing product lines and of the efforts and focus of management?” said Jay Defibaugh, analyst at Credit Suisse First Boston in Tokyo.

Delays to the recent launch of Legend of Zelda, an eagerly awaited software title, “raises the question of whether Nintendo has enough development resources in the first place,” Mr Defibaugh said.

“Nintendo seems to run a very lean ship and they do have a lot of platforms to support,” he added.

While Nintendo is busy trying to extend the life of the GBA, promoting the DS and now the Micro, it risks becoming a niche player in the home console market, which is now dominated by Sony's PlayStation and Microsoft's XBox.

Microsoft this week announced pricing on its dual version Xbox 360 next-generation games consoles, selling for $299 and $399 in the US.

PlayStation 2 has sold more than 90m units worldwide, while XBox has sold 21.9m and GameCube 18.5m.